The Political Economy of Independent Ukraine: Captured by the Past (Studies in Economic Transition)

This study offers an analysis of the reasons for Ukraine's abysmal economic performance during the 1990s. The text's man thesis is that economic development was blocked by a set of parasitic mechanisms at all levels of the economy that prevented the growth of value-added economic activities. These parasitic mechanisms, already developed under Soviet rule ("beating the system" by redistributing goods and services while disregarding formal rules), became a widespread practice. Cover......Page 1 Contents......Page 8 List of Figures, Schemes and Tables......Page 11 Acknowledgements......Page 12 1 Introduction......Page 14 Pre-socialist legacies......Page 21 Soviet Ukraine: forced industrialization of a peasant society......Page 22 The hidden disintegration of Soviet socialism in Ukraine......Page 25 Independence as a result of implosion in Moscow......Page 30 Economic free fall and the slow pace of economic reform......Page 33 Conclusion......Page 34 The structure of government......Page 36 Diffusion of authority......Page 39 The state bureaucracy as an independent force......Page 43 The state bureaucracy and corruption......Page 47 From a developmental to a predatory state......Page 51 The character of elite networks......Page 57 Democracy, interest representation and political parties......Page 60 Conclusion......Page 61 1991–94: muddling through......Page 62 Price liberalization......Page 64 Monetary stabilization under President Kuchma?......Page 66 The creation of a financial infrastructure......Page 69 The state as redistributor......Page 71 Privatization......Page 72 The emergence of private small and medium-sized enterprises......Page 75 Demonopolizing the economy......Page 78 Tax reforms......Page 79 The shadow economy......Page 80 The role of international financial organizations......Page 81 Conclusion......Page 85 Deindustrialization......Page 87 Machine building and the military-industrial complex......Page 90 Heavy metallurgy......Page 91 The energy sector......Page 94 The agro-industrial complex......Page 100 The disintegration of public services......Page 109 Conclusion......Page 111 Restructuring at the enterprise level......Page 113 The case of Avtozaz......Page 119 Conclusion......Page 122 Trade war with the countries of the former Soviet Union......Page 123 Mismanaged opening up......Page 126 Commodity composition of exports and imports: continuous deterioration......Page 129 Import and import competition......Page 131 Disruption of supply chains......Page 133 Foreign direct investment......Page 136 Marginalization in the world economy......Page 146 Conclusion......Page 148 The choice for a centralist state......Page 149 The province of Donetsk: captured by the past......Page 152 The province of Zaporizhzhya: missed opportunities......Page 157 Conclusion......Page 160 An anti-modern society against 'modern' institutions......Page 162 The post (Soviet) socio-psychological syndrome......Page 164 Implications for economic development......Page 171 Social preconditions for a modern industrial society are missing......Page 173 The mechanisms of exclusion......Page 176 How to foster modernization of society and economy......Page 179 Conclusion......Page 180 Western perspectives and Ukrainian realities......Page 182 Not a market economy but a virtual economy......Page 185 Belief systems underpinning parasitic mechanisms......Page 186 Feudal property systems and Ukraine......Page 190 Coping mechanisms of the population and social exclusion......Page 192 Factors contributing to involution......Page 193 Is the Ukrainian model unique?......Page 194 Path dependency of Ukraine......Page 196 Alternative development paths......Page 200 Policy recommendations......Page 202 Notes......Page 206 Bibliography......Page 229 Chronology......Page 239 C......Page 242 E......Page 243 I......Page 244 M......Page 245 P......Page 246 S......Page 247 V......Page 248 Z......Page 249 "The Political Economy of Independent Ukraine argues that the reasons for the abysmal economic performance of Ukraine during the 1990s are social and political in nature. The author analyses the legacy of the Soviet past and shows how with its demise of Soviet socialism, a world that was hitherto hidden came to the fore. A set of parasitic mechanisms at all levels of the economy have enveloped that prevent value-added economic activities." "Economic reform is interpreted by government as approving the present economic system, which is neither a centrally planned economy nor a market economy. Although some capitalist elements have emerged in Ukraine, they are subordinated to the (quasi) state sector in which production sectors are allocated according to political criteria. The quasi-state sector also comprises many privatized and collective agricultural interprises that do not function in a market environment. The state has become rent-seeking and predatory in character. The state bureaucracy is a paralysing and major anti-reform force. The people of the state in economic development is still overwhelming and a large part of national income is still redistributed in the direction of value-subtracting industries."--BOOK JACKET The Political Economy of Independent Ukraine analyzes the reasons for the abysmal economic performance of Ukraine during the 1990s. The main thesis is that economic development was blocked by a set of parasitic mechanisms at all levels of the economy that prevented the development of value-added economic activities. Those parasitic mechanisms already developed under Soviet rule ("beating the system" by redistributing goods and services while disregarding formal rules) became a widespread practice. The Political Economy of Independent Ukraine analyses the reasons for the abysmal economic performance of Ukraine during the 1990s. The main thesis is that economic development was blocked by a set of parasitic mechanisms at all levels of the economy that prevented the development of value-added economic activities. These parasitic mechanisms already developed under Soviet rule ('beating the system'by redistributing goods and services while disregarding formal rules) became a widespread practice. Analyzes the reasons for the abysmal economic performance of Ukraine during the 1990s. The text's main thesis is that economic development was blocked by a set of parasitic mechanisms at all levels of the economy that prevented the growth of value-added economic activities.